Jack Ma Toys With Audience on Alibaba IPO

Jack Ma, the founder of Alibaba Group Holding Ltd., teased the audience at an investment conference Wednesday with a typically playful reference to the Chinese e-commerce giant’s widely expected initial public offering.

Alibaba has never officially said that it is preparing to list its shares, but many bankers and investors expect the company is gearing up for a potential multibillion-dollar IPO, in part because its share buyback agreement with Yahoo last year created an incentive for such a move.

Bloomberg News

Alibaba earlier this month named Jonathan Lu as its new chief executive to succeed Mr. Ma, who said in January that he would step down as CEO.

In a rare public appearance since stepping back from Alibaba’s day-to-day operations, Mr. Ma delivered a keynote speech at the Credit Suisse Asian Investment Conference in Hong Kong. Addressing investors, Mr. Ma said that Alibaba, which runs websites that work as platforms for businesses selling their products, is not an “e-commerce company” like Amazon.com but “a company that helps others do e-commerce.”

While Alibaba wants small and midsize enterprises that rely on its e-commerce platforms to make money, the owners of those businesses also want Alibaba to make money, Mr. Ma said.

“They say, ‘please make money because if you don’t make money we go bankrupt,’” Mr. Ma said. “I say, ‘don’t worry about us, we are making money. I think when we IPO you’ll know the numbers.’” The audience, surprised by an unexpected reference to an IPO, burst into laughter.

During the speech, Mr. Ma, a former English teacher who founded Alibaba from his apartment in 1999, also talked about the future of e-commerce in China. E-commerce in China has grown rapidly in recent years, and Alibaba’s online platforms, such as Taobao and Tmall shopping sites, have also seen robust growth.

With more people gaining constant Internet access through mobile devices, Mr. Ma said that growth will accelerate. “I told the prime minister that the next five years will be the golden period of e-commerce and Internet in China.” Today, Alibaba Group alone accounts for about 5% of China’s retail sales, Mr. Ma said. In five years, about 30% of the country’s retail sales will be online, even based on a conservative view, he added.

In the U.S., e-commerce is like “dessert” after a meal, supplementing firmly-established traditional business, Mr. Ma said. “It’s very difficult for e-commerce in the U.S. to grow and surpass traditional businesses.” In China, on the other hand, e-commerce becomes the “main course” because the infrastructure for running traditional business is so poor, he said.